Have you ever thought what taking a KiwiSaver holiday means? It could mean you'll be receiving postcards from your friends in retirement while you stay home trying to make ends meet on NZ Super.

Whether it's an official KiwiSaver "contributions holiday" or you're just not paying because you're self-employed or another reason, the ignominy of those postcards or Facebook updates could be yours.

The word "holiday" gives the wrong impression that it's something good, says David Boyle general manager investor education at the Commission for Financial Capability (CFFC).

"Unfortunately [people who take extended KiwiSaver holidays] might not be sending any postcards, just receiving them."

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The long-term impact can be stark. A five-year break at age 25 would cost around $40,000 when you retire, says Grant Hodder, Head of Product, ANZ Wealth. That takes into account not just the contributions, but also growth, employer contribution and member tax credits.

Don't think about saving yourself $1 by not contributing, says Sam Stubbs, founder of Simplicity KiwiSaver. "You are costing yourself between $3 and $10 in your retirement, depending on when you take the holiday."

After 12 months in KiwiSaver (or less if suffering financial hardship) anyone can take up to five years' contributions "holiday" without giving a reason.

ANZ, New Zealand's largest KiwiSaver provider, says that more than 80 per cent of its members who ask for a contributions holiday take it for the maximum five years. Many roll over onto another holiday when the first finishes.

The number of us taking holidays or not contributing - excluding the under 18s - amounted to 765,049 people in the year to June 30, 2016 according to the Financial Markets Authority. That number is growing.

The numbers of non-contributors who aren't taking an official "holiday" are harder to break down because they include children, who aren't earning anyway. However, in the 2016 financial year 222,344 members including under-18s stopped contributing and 180,275 restarted contributions in that year.

That's lots of numbers. But each one represents a real person who might find themselves less well off in retirement than fellow Kiwis who earned the same but saved little-and-often throughout their working lives.

Many of those who aren't contributing are self-employed people who don't have to make contributions even if they're KiwiSaver members.

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Some set up automatic payments to their provider.

Many plan to make lump sums, but don't quite execute their intentions. Even if they do pay 3 per cent of their income into KiwiSaver, self-employed people are not receiving the employer contribution so may be putting away half of what their peers are.

There are of course valid reasons to take KiwiSaver holidays. Boyle says those range from being between jobs to facing more short-term, pressing financial commitments.

But some KiwiSaver holiday-makers want extra spending money now.

Claire Matthews, director of academic programmes at Massey University, is concerned at the length of the break being taken.

"If it's a 12 month period only you can think 'we are past that now and we should start it again'," says Matthews.

The CFFC is calling for the Ministry of Business, Innovation and Employment (MBIE), which manages the legislation, to reduce renewable KiwiSaver holidays from five years to one and at the same time rename the concept a "suspension", which doesn't have the jolly connotations of the word "holiday".

Another big issue is that those not contributing to KiwiSaver are often missing out on the 3 per cent employer contribution paid over and above their salary or wage.

Not every employer pays KiwiSaver as extra and some use smoke and mirrors to make KiwiSavers pay their own contribution with a total remuneration package.

That aside, if your employer is willing to pay 3 per cent on top of your wages or salary you're effectively taking a pay cut when you go on a contribution holiday, says Matthews.

"Your employer is not going to give it to you any other way."

Not paying into KiwiSaver can be a big mistake if you want to buy your first home in the future. By saving you can qualify for both the first home withdrawal and in many cases a HomeStart grant.

The withdrawal allows you to use all but the $1000 kick start. That means you can use your employer's contributions, investment growth and government tax credits to buy your first home.

The subsidy gives you up to $10,000 per couple free towards your first home if you've been saving for five years or $20,000 for a new home. Halve that if you're buying on your own.

When you're 25 and retirement is a long way off it can be tempting to take the cash and use it to enjoy yourself.

Closer at hand, however, that holiday can really dent your chances of signing the sale and purchase contract and picking up the keys.